1. Technical Field
The present invention relates generally to methods and systems for promoting the use of financial accounts. More particularly, the present invention relates to a method and system which facilitates generating, communicating and managing a customized reward offer presented to a group of account holders to benefit an affinity group sponsor.
2. Description of the Related Art
Tens of millions of credit card holders have an account which is sponsored by an affinity group partner. Methods and systems for promoting usage of credit card accounts based on affinity relationships are well known. Such methods and systems are generally designed to reward the affinity group sponsor based on account usage of credit card holders belonging to the sponsor's affinity group.
Many credit card issuers offer credit card accounts sponsored by an affinity partner. These credit card issuers believe a credit card holder who is a member of an affinity group is more likely to use his account if it benefits the affinity group sponsor. Credit card issuers further expect higher response rates and reduced attrition rates for credit card accounts sponsored by an affinity partner. Examples of affinity group sponsors include trade groups, alumni associations, religious organizations, sports teams and professional associations.
An affinity group sponsor typically receives three types of benefits from a credit card issuer. The first benefit credit card issuers generally offer to an affinity group sponsor is a finder's fee for acquiring each new affinity group related account. The second common benefit an affinity group sponsor may receive is a percentage rebate on all affinity card holder account transactions. Affinity group sponsors may also receive a portion of all finance charges applied to affinity card holder accounts.
One example of an affinity credit card is the People's Bank Visa Card that is sponsored by the National Rifle Association ("NRA"). The NRA receives 0.5% rebate for all transactions conducted through card holder accounts which are affiliated with the NRA. Drexel Alumni Affinity Card and Binghamton University Alumni Association MasterCard are two other examples of credit cards affiliated with an affinity group sponsor. These alumni associations receive contributions for every charge made by an affiliated card holder.
Although there are currently programs which enable affinity group sponsors to benefit from card holder account performance, there are significant shortcomings associated with these types of programs. A first shortcoming is the absence of a definite periodic performance target. Because an affinity group sponsor is rewarded for virtually any account usage by affiliated card holders, the affiliated card holders are not necessarily encouraged to increase their account usage. An affinity group sponsor continues to earn rewards even if the charge volume of many affiliated card holders during a particular period drops significantly compared to a previous period. In fact, many card holders may rely on the other members of the affinity group to provide benefits to the sponsor.
A second shortcoming of such programs is that the rewards are based on a projection of member card holder activity at the inception of the program. The reward level, therefore, is not set or adjusted based on actual performance.
Another shortcoming of such programs is that an issuer using a current credit card issuer reward processing system cannot share the risks of poor group performance with the affinity group sponsor. For example, consider a program that rewards a sponsor for every dollar charged by an affiliated member. If the affinity group's aggregate default rate is higher than the industry average (or the particular bank's average), the affinity group sponsor continues to earn rewards associated with affinity group member charges. Using prior art processing systems, no penalty can be imposed on the sponsor for poor payment on the part of the affinity group members. Furthermore, current systems do not provide a measurable means by which affinity group sponsors can influence affinity members to preferentially use the affinity credit card over another credit card or to preferentially pay the affinity credit card over another credit card.
Present affinity card programs are also limited in terms of awarding rewards to only the affinity group sponsor for customer acquisition. There is no system in place that enables members of an affinity group to enroll other members and earn subsequent rewards for themselves and/or for the group.
Accordingly, the shortcomings associated with the related art have heretofore not been adequately addressed. The present invention addresses such problems by providing a system and processing approach that have not previously been proposed.